Tribunal grants stay on property possession order, maintains attachment, restricts property disposal.

The Tribunal allowed the applications for stay of the order regarding taking over possession of the attached properties, directed the continuation of the attachment order, and prohibited the parties from disposing of or creating any third-party rights in the properties. The matter was listed for further hearing on 1st November 2017.

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Issues Involved:
1. Confirmation of Provisional Attachment Order under Section 5(1) of the Prevention of Money Laundering Act, 2002.
2. Stay of the order and directions to restrain the respondent from taking possession of the attached properties.
3. Amendment of memo of appeal and condonation of delay in filing the appeal.
4. Constitutional validity of Section 8(4) of the Prevention of Money Laundering Act, 2002.
5. Jurisdiction of the Enforcement Directorate to attach properties already in the custody of the court.

Detailed Analysis:

1. Confirmation of Provisional Attachment Order:
The appeals are directed against the order dated 21.08.2014 by the Adjudicating Authority, confirming the Provisional Attachment Order under Section 5(1) of the Prevention of Money Laundering Act, 2002. The charge sheet filed by Thane Police on 26.05.2006 against 18 accused persons, including the appellants, revealed that they had committed offenses under various sections of the IPC, which are scheduled offenses under PMLA, 2002. The respondent passed the Provisional Attachment Order No. 05/2014 on 27th March 2014, based on the investigation and material available, including the charge sheet.

2. Stay of the Order and Restraint from Taking Possession:
Applications were filed seeking a stay of the order and directions to restrain the respondent from taking possession of the attached properties. The Tribunal noted that the properties were already in the custody of the court and had been given to the appellants on bond by the court in 2007. The Tribunal allowed the prayer for stay, directing that till the appeals are finally decided, action for taking over possession of the flats shall remain stayed. However, the order of attachment of the said flats shall continue, and the appellants shall not dispose of or create any third-party right or interest in the properties.

3. Amendment of Memo of Appeal and Condonation of Delay:
Applications for amendment of memo of appeal and condonation of delay in filing the appeal were allowed. These applications were consequential due to the initial appeal being filed jointly and later treated as an appeal by one of the parties, leading to some delay in filing separate individual appeals.

4. Constitutional Validity of Section 8(4) of PMLA:
The appellants challenged the constitutional validity of Section 8(4) of PMLA, 2002, before the Hon’ble High Court, Bombay. The High Court passed an order stating that if the provisional attachment order is confirmed by the Adjudicating Authority, no effect is to be given to the said order for two weeks, allowing the applicant to approach the proper forum.

5. Jurisdiction of Enforcement Directorate:
The Tribunal considered the jurisdiction of the Enforcement Directorate to attach properties already in the custody of the court. It was observed that in terms of Rule 7 of The Prevention of Money-laundering (Taking Possession of Attached or Frozen Properties Confirmed by the Adjudicating Authority) Rules, 2013, the authorized officer is required to make an application to the court for the release of such property in favor of the Directorate of Enforcement. The Tribunal rejected the respondent's submission that possession could be taken without the court's leave, emphasizing the need for adherence to the Possession Rules.

Conclusion:
The Tribunal allowed the applications for stay of the impugned order regarding taking over possession of the attached properties, directed the continuation of the attachment order, and prohibited the appellants from disposing of or creating any third-party rights in the properties. The applications were disposed of accordingly, and the matter was listed for further hearing on 1st November 2017.

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